Taxation and Foreign Tax Offset
Added on 2020-04-01
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Running head: TAXATION LAWTaxation LawName of the Student: Name of the University: Author’s Note:
1TAXATION LAWTable of ContentsAnswer to Question No 1...........................................................................................................3Requirement 1.1.....................................................................................................................3Issue:..................................................................................................................................3Rules:..................................................................................................................................3Application:........................................................................................................................3Conclusion:........................................................................................................................4Requirement 1.2.....................................................................................................................4Issue:..................................................................................................................................4Rule:...................................................................................................................................4Application:........................................................................................................................4Conclusion:........................................................................................................................5Requirement 1.3.....................................................................................................................5Issue:..................................................................................................................................5Rule:...................................................................................................................................5Applications:......................................................................................................................5Conclusion:........................................................................................................................6Requirement 1.4.....................................................................................................................6Issue:..................................................................................................................................6Rule:...................................................................................................................................6Applications:......................................................................................................................7Conclusion:........................................................................................................................7
2TAXATION LAWAnswer to Question No 2...........................................................................................................8Issue:..................................................................................................................................8Rule:...................................................................................................................................8Application.........................................................................................................................8Conclusion:......................................................................................................................10Answer to Question No 3.........................................................................................................11Answer to Question No 4.........................................................................................................13Reference List..........................................................................................................................14
3TAXATION LAWAnswer to Question No 1 Requirement 1.1 Issue: The threat and the challenge that has been depicted in accordance to the currentscenario has been to take care of the transportation cost for the moving the machine to a newlocation and gaining the permissible deductions within the income tax. There are variousrules that can be used for this case study and they have been laid down as follows: Rules: “Section 8-1 of ITAA 1997”“British Insulated & Helsby Cables v. Atherton (1926)” Application: The expense that is created for the intention of transferring the machine to a new siteis added in the capital expenditure which has been due to “Section 8-1 of ITAA 1997”.“Section 8-1 of ITAA 1997” has indicated that subtractions are allowable for the income taxpurpose is permitted when the cost is undertaken for trading activities for every day. It haseven depicted that the cost that is generated for the relocation of the machine reveals a smalltransition, which may not allowed for any deductions and in a manner increases thedepreciation expenses (Gitman, Juchau and Flanagan 2015). It has been highlighted in the “Taxation Ruling of TD 93/123” that the costconnected for the machine installation and the establishment of the process of productiondeclares the profit and hence leads to increase in the operational benefits of the organization.Therefore, in accordance to “Section 8-1 of ITAA 1997” the cost of relocating of themachine in the new area is known as the capital expenditure and hence no permissiblesubtractions are given in this condition (Petty et al. 2015). In compliance to “British
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